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Minn. Stat. § 412.221. <br />"Financing Infrastructure Projects" <br />Minnesota Cities (Aug. 2009, p. 6). <br />Handbook, Chapter 21. <br />Handbook, Chapter 24. "Municipal <br />Borrowing Authority," Minnesota <br />Cities (July, 2001 p. 19). <br />Minn. Stat. § 475.52. <br />HANDBOOK FOR MINNESOTA CITIES <br />CHAPTER 25 <br />Chapter 25 <br />Financing public <br />improvements <br />I. Financing and planning <br />overview <br />Cities use a variety of funding techniques to construct, maintain, or <br />improve local infrastructure made up of the basic facilities, services, and <br />systems a city needs to function. Local infrastructure varies greatly from <br />one city to the next but may include buildings, libraries, water and sewer <br />systems, transportation and communications systems, parks, and public <br />thoroughfares such as sidewalks, trails, streets, bridges, and parking <br />facilities. Money to fund local improvements comes from a variety of <br />sources and often combines the following income generating methods and <br />situations. This chapter focuses on the most commonly used legislatively <br />authorized financing tools available to cities. <br />Consider combining the financing tools described in this chapter with a <br />long -term capital budgeting plan. A capital budgeting plan (sometimes <br />referred to as a capital improvement plan or CIP) typically lists five or six <br />years of needed capital improvements (sewer and water infrastructure, <br />public buildings, equipment, or land purchases), their order of priority, and <br />the means of financing. A plan allows a city to build up a fund balance for <br />these projects. Priorities in the capital budget program remain tentative, and <br />the council reviews them annually. Although capital improvement <br />budgeting may appear cumbersome and unwieldy to small cities, this is <br />actually not the case. A capital budget plan provides protection to small <br />cities, avoiding unforeseen infrastructure failures and expensive emergency <br />repairs. <br />II. Issuing debt <br />A. Bonds <br />A person getting a loan to finance the purchase of a car -- but cities may not <br />borrow money from banks through conventional loans to finance local <br />improvements. Cities commonly raise capital to pay for local <br />improvements by borrowing money. Cities incur debt and borrow money <br />by issuing and selling municipal bonds also known as general obligation <br />(GO) bonds. GO bonds often create funding tied to a specific use (such as <br />water systems) but are backed by the taxing power of the city. <br />This chapter last revised 12/1/2012 <br />25:3 <br />